Sensex gains 402 points, Nifty ends at 8325; SBI, Vedanta up 5%

11 May 2015

3:30 Market closing: Bulls ended the day with a bang. The Sensex ended up 401.91 points or 1.5 percent at 27507.30 and the Nifty was up 133.75 points or 1.6 percent at 8325.25. About 1744 shares advanced, 989 shares declined and 152 shares were unchanged.

SBI and Vedanta were up over 5 percent while Hero, Tata Motors and Tata Steel were lead gainers while HUL, ITC, Wipro and Bharti Airtel were losers in the Sensex.

3:10 pm Result: Electrical goods maker Havells India today reported 11 percent decline in its standalone net profit at Rs 121.85 crore for the fourth quarter ended March 31, 2015. The company had posted a standalone net profit of Rs 136.92 crore in the January-March period of the previous fiscal (2013-14), Havells said in a BSE filing. However, the company's net sales on a standalone basis rose to Rs 1,339.69 crore for the fourth quarter, up 3.04 percent compared to Rs 1,300.09 crore it posted during the same period of the previous financial year.

"Our growth this year has been almost the same as last year. We grew by 11 percent and the macro environment has impacted both investment and industrial demand," Havells India Chairman and Managing Director Anil Rai Gupta said. He further said that during the year, Havells focused on strengthening connect with channel partners, including last mile retailers and product portfolio rationalisation.

2:50 pm Crude oil: China overtook the United States as the world's top importer of crude oil for the first time in April, and its purchases are expected to remain strong despite a slowing economy, with far-reaching consequences for global oil and commodities markets.

The soaring imports came as a surprise as growth in the world's second-largest economy was sputtering and its oil demand was expected to ease. However, low oil prices and China's series of interest rate cuts - including one over the weekend - in a bid to stoke growth are factors boosting demand.

China's crude oil imports hit a record of almost 7.4 million barrels a day (bpd) last month, putting it ahead of the United States' estimated imports of 7.2 million bpd for April, Reuters data show.

2:30 pm Results: Japan's Suzuki Motor Corp said its annual operating profit fell for the first time in six years, missing its own target, as weak demand at home and Southeast Asia offset hefty currency gains and robust earnings in India, its biggest market.

Still, for the current business year, Suzuki forecast a 5.9 percent rise in operating profit to 190 billion yen, with higher vehicle sales in India and Europe making up for sinking demand in Japan. Analysts on average expect operating profit of 214.94 billion yen.

The Sensex is up 359.04 points or 1.3 percent at 27464.43 and the Nifty is up 118.35 points or 1.4 percent at 8309.85. About 1724 shares have advanced, 844 shares declined, and 151 shares are unchanged.

Midcap index is up 2 percent while FMCG is in red. Vedanta, SBI, Hero, Hindalco and Tata Steel and top gainers while HUL, ITC and Wipro are laggards in the Sensex.

The worst seems to be over for the Indian market and Nifty could find a strong support around 8000 levels is the word coming in from Chris Roberts, Asianomics. A close above 8505 on a daily basis would confirm that the bullish trend is resuming but a close below 7961 on a daily basis would be a worry, he says in an interview to CNBC-TV18

1:50 pm FII view: The worst seems to be over for the Indian market and Nifty could find a strong support around 8000 levels is the word coming in from Chris Roberts, Asianomics. A close above 8505 on a daily basis would confirm that the bullish trend is resuming but a close below 7961 on a daily basis would be a worry, he says in an interview to CNBC-TV18.

With China on an interest rate cutting spree, the focus has been on that market from March to April, says Roberts. The People's Bank of China (PBOC) reduced both the benchmark lending and deposit rate by 25 basis points to 5.1 percent and 2.25 percent, respectively. Moreover, the MSCI India has fallen 28 percent versus MSCI China since March to April. However, now since China has already seen a strong move, people would wait for consolidation to add further exposure there and would look at India that has now come back to a level which is a good support, he adds.

1:30 pm Brokergage view: According to Bank of America Merrill Lynch worst is behind us and hence retains buy rating on PNB. It feels earnings growth is expected to rebound to 25-40 percent in FY16-17 led by unwinding of credit costs and higher recoveries. The brokerage has slashed target price to by 16 percent to Rs 185 for 18-20 percent earnings per share (EPS) cut.

''Overall stressed asset formation appears to have peaked. PNB still has strong deposit franchise and higher than average Tier 1 (9.3 percent). Finally, PNB would also benefit from the rate cuts and pick-up in growth,'' it says in report.

Terming it a 'wash-out' quarter, CLSA retains outperform rating given reasonable valuations and an expected recovery in earnings profile but lowered earnings by 30 percent.

The Sensex is up 360.00 points or 1.3 percent at 27465.39 and the Nifty up 116.75 points or 1.4 percent at 8308.25. About 1670 shares have advanced, 822 shares declined, and 147 shares are unchanged.

Vedanta is up 6 percent while SBI gains 5 percent. Tata Steel, Hero and Hindalco are top gainers in the Sensex. Among the losers are Wipro, HUL and Reliance.

Car sales in India rose by 18.14 percent in April, the fastest rate of growth in 30 months, as the auto industry continued its journey on the road to recovery riding on improved consumer sentiments, new models and favourable fuel prices.

According to the data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in April stood at 1,59,548 units compared with 1,35,054 in the same month of 2014.

"We have started the new fiscal with growth in all the segments, except in three categories. For the passenger cars segment, this is the seventh straight month of growth," SIAM Director General Vishnu Mathur said. This is the fastest growth rate we have witnessed in 30 months. "The previous fastest was in October 2012 when we saw a growth of 21.19 percent at 1,69,788 units," he said.

12:50 pm Why bad loans? Bad loans or non-performing assets (NPAs) have been a worry for public sector banks for some time now. While most PSU banks have shown an improvement in gross non-performing loans in the fourth quarter of FY15, three out of 17 banks have reported a worsening situation.

Diwakar Gupta, former MD & CFO of SBI , said the primary reason behind the poor show is the fact that not much has changed on the ground for PSU banks. Public sector banks need to track credit better to control gross NPLs, he added. SL Bansal, former CMD of Oriental Bank of Commerce on the other hand said private sector banks, except ICICI Bank , gained by not being present in the infrastructure space and the stress can be seen even on ICICI's books over the past few quarters.

Meanwhile, what is adding to the positive investor sentiment is the dividend and bonus issue. The board of directors has recommended issue of bonus shares in the ratio of 1:1 subject to approval of the shareholders of the company. The board has also recommended a dividend at the rate of Re 1.00 per share of face value of Re 1.00 each aggregating of Rs 722.22 Lacs (including corporate dividend distribution tax of Rs 122.16) for the year ended March 31, 2015

The market continues to surge as the Nifty holds the crucial 8300-level. The 50-share index is up 116.85 points or 1.4 percent at 8308.35 while the Sensex is up 373.53 points or 1.4 percent at 27478.92. About 1626 shares have advanced, 686 shares declined, and 146 shares are unchanged.

Metals are stars of the day with Vedanta and Hindalco as lead gainers. SBI, Hero and HDFC are other top gainers in the Sensex. Among the losers are HUL and Reliance.

The rupee appreciated further by 16 paise to quote at 63.78 against the American unit. Sustained dollar selling by exporters and some banks, too, had a positive impact on the rupee, a forex dealer said. However, firm dollar overseas after strong jobs data announced last weekend and continued capital outflow limited the rupee rise, he added.

Meanwhile, China cut interest rates for the third time in six months on Sunday in a bid to lower companies' borrowing costs and stoke a sputtering economy that is headed for its worst year in a quarter of a century.

Analysts welcomed the widely-expected move, but predicted policymakers would relax reserve requirements and cut rates again in the coming months to counter the headwinds facing the world's second-largest economy.

The People's Bank of China (PBOC) said it was lowering its benchmark, one-year lending rate by 25 basis points to 5.1 percent from May 11. It cut the benchmark deposit rate by the same amount to 2.25 percent.

11:55 am Market outlook: Dipen Sheth of HDFC Securities believes the recent fall was merely the first pullback in a multi-year, multi-decade bull market. In an interview to CNBC-TV18, Sheth says the correction has thrown up a great opportunity for investors to buy, if they haven't already. So, does that mean its all going to be a one way rally here on? Sheth says no. He expects the occasional correction, but sees limited downside and stronger upswings. Sheth is bullish on PSU banks, but advises investors to buy it after a while. He is positive on Asian Paint and adds that it is one the best proxy stock on playing the infra and housing space.

11:35 am Result: Bank of Baroda's net profit fell 48.3 percent to Rs 598 crore in the March quarter from Rs 1157 crore in the corresponding quarter last fiscal. The management has said decline in profit is due to increase in non-performing loan (NPLs) provision. Its provisions, during the quarter, stood at Rs 1,817 crore from Rs 1262 crore in last quarter and Rs 1153 crore on a yearly basis.

The bank's provision coverage ratio was at 64.99 percent as on March 31 while capital adequacy ratio (CAR) stood at 12.6 percent versus 12.42 percent quarter-on-quarter. It net interest income (NII) or the difference between interest earned and interest expended was up 1.5 percent at Rs 3171 crore from Rs 3124 crore year-on-year.

However, the bank's non-performing asset (NPA) improved to 3.72 percent from 3.85 percent in the last quarter. Its net NPA was at 1.89 percent compared to 2.11 percent (Q-o-Q).

11:20 am Market surges: The Sensex is up 354.00 points or 1.3 percent at 27459.39, and the Nifty is up 112.30 points or 1.4 percent at 8303.80. About 1548 shares have advanced, 657 shares declined, and 136 shares are unchanged.

Vedanta is up over 4 percent while SBI and Hindalco gain 4 percent. Hero and HDFC are other top gainers in the Sensex. HUL is still down 2 percent.

The market continues its upward swing as the Nifty races towards 8300. The 50-share index is up 91.00 points or 1.1 percent at 8282.50. The Sensex is up 307.85 points or 1.1 percent at 27413.24. About 1497 shares have advanced, 613 shares declined, and 127 shares are unchanged.

SBI is up 4 percent while Vedanta, Hindalco, Hero and Coal India re top gainers in the Sensex. Among the losers are HUL, Reliance, HDFC Bank and Wipro.

Bank of Baroda is up 9 percent after its gross non-performing asset (NPAs) improved to 3.7 percent in March quarter. Its net profit fell to Rs 598 crore on a yearly basis while net interest income was at Rs 3171 crore in Q4 FY15.

10:30 am Result poll: Bank of Baroda's fourth quarter profit is seen falling 22.6 percent year-on-year to Rs 896 crore due to higher provisions, according to the average of estimates of analysts polled by CNBC-TV18. However, the bottomline may show sequential rise because Q3 was impacted by a one-off tax related item besides provisions.

Net interest income, the difference between interest earned and interest expended, may grow by 7.1 percent to Rs 3,346.5 crore in January-March quarter compared to Rs 3,124.3 crore in the year-ago period. Analysts feel the asset quality pressure may continue in Q4. The management stated (post third quarter earnings) that asset quality will remain under pressure till April-September period of FY16.

The market is in high spirits and is holding its early gains. The Sensex is up 247.91 points or 0.9 percent at 27353.30 and the Nifty is up 68.40 points or 0.8 percent at 8259.90. About 1306 shares have advanced, 396 shares declined, and 113 shares are unchanged.

Metals, auto and pharma stocks are lending major support to the indices. Hindalco is up 3 percent while Hero, HDFC, Tata Steel and Bajaj Auto are top gainers. HUL is down 2 percent.

Oil prices held steady in Asia today after an interest rate cut by China boosted demand hopes in the world's top energy consumer, while a healthy US jobs report also provided support, analysts said. US benchmark West Texas Intermediate for June delivery eased eight cents to USD 59.31 while Brent crude for June rose two cents to USD 65.41 in late-morning trade. China's central bank on Sunday cut its key rates by 25 basis points- after two similar moves since November, as it looks to support the world's number two economy, which grew last year at its slowest pace since 1990.

The move is the latest stimulus by the People's Bank of China, which has also twice this year reduced the amount of cash lenders must keep in reserve.

9:50 am Buzzing: Shares of Cipla jumped over 2 percent intraday as Credit Suisse has upgraded it to outperform. The brokerage has also increased target price to Rs 750 per share and raised FY16E earnings per share (EPS) by 12 percent due to strong Nexium sales.

''Cipla's growth trajectory is expected to change from 10 percent EBITDA CAGR over the last three years to 24 percent EBITDA CAGR. Margins should expand with completion of investment phase and start of monetisation of respiratory portfolio,'' it says in a report.

According to the brokerage, Nexium profits leading to strong earnings growth in H1FY16 and approval of generic Advair MDI in UK are strong near-term triggers of Cipla.

9:30 am Market check: The market is moving ahead with support from capital goods, metals, auto and pharma. The Sensex is up 212.30 points or 0.8 percent at 27317.69 and the Nifty is up 60.25 points or 0.7 perceny at 8251.75. About 1066 shares have advanced, 305 shares declined, and 89 shares are unchanged.

Hindalco, Hero Motocorp, HDFC, Bajaj Auto and Cipla are top gainers in the Sensex. Among the losers are HUL, Wipro, HDFC Bank and ITC.

The market has opened in positive terrain as the Sensex is up 77.46 points at 27182.85. The Nifty is up 51.70 points at 8243.20. About 424 shares have advanced, 83 shares declined, and 70 shares are unchanged.

Tata Steel, Tata Motors, Cipla, ICICI Bank and Vedanta are top gainers in the Sensex.

The Indian rupee opened with marginal gain of 9 paise at 63.85 per dollar versus 63.94 Friday.The dollar edges higher against the euro. The euro dips below 1.12 to the dollar. The dollar index is currently at 94.80.

Agam Gupta of Standard Chartered said, "We expect the USD-INR pair to trade in the range of Rs 63.65-64.05/dollar for the day as exporters will be looking to sell dollars on upticks to Rs 64/USD and the normal daily demand for dollar should kick in around Rs 63.60-63.65/dollar."Globally, US markets closed sharply higher on Friday as investors welcomed a "goldilocks" jobs report.

Asian markets rallied in morning trade as China rolls out its third interest rate cut since November. The people's bank of china cuts its benchmark lending rate and one-year deposit rates by 25 basis points.